IIBM Institute of Business Management
Examination Paper: Project Management
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Project Management
Section A: Objective Type (30 marks)
•This section consists of multiple choices questions and short answer type questions.
•Answer all the questions.
•Part One questions carry 1 mark each and Part Two questions carry 5 marks each.
Part One:
Multiple choices:
1. During _________formal tools and techniques were developed to help and manage large
complex projects.
a. 1950s
b. 1980s
c. 1920s
d. 1990s
2. PERT stands for:
a. Program Evaluation and Reverse Technique
b. Progress Evaluation and Review Technique
c. Program Evaluation and Review Technique
d. None of the above
3. The most basic model of any Operating System is:
a. Project Model
b. Input-output model
c. Output-input model
d. None of the above
4. Overall complexity =
a. Organizational complexity*resource complexity*technical complexity
b. Organizational complexity+technical complexity-resource complexity
c. Technical complexity+resource complexity/organizational complexity
d. Organizational complexity*resource complexity/technical complexity
5. Relevant areas of the APM body of knowledge are:
a. Quality Management
b. Budgeting and cost Management
c. Project Cost Management
d. Both ‘a’ and ‘b’
Examination Paper: Project Management
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IIBM Institute of Business Management
6. Costs associated with the planning process include:
a. Planer’s tools
b. Opportunity cost
c. Planned labour and associated expenses
d. All of the above
7. CPA stands for:
a. Critical Path Analysis
b. Common Path Analysis
c. Critical Path Algorithm
d. Common Problem Analysis
8. The project duration with the normal activity time is ____days.
a. 11
b. 16
c. 17
d. 21
9. The nature of the work organization is important as it:
a. Defines responsibility and authority
b. Outlines reporting arrangements
c. Determines the management overhead
d. All of the above
10. Matrix Management was invented by
a. Mullins
b. Belbin
c. Drucker
d. Frederick Taylor
Part Two:
1. Define ‘Cost Estimating Techniques’.
2. Write a note on ‘Critical Path Analysis’.
3. Differentiate between General Management and Project Management.
4. What is ‘Team Life Cycle’?
END OF SECTION A
Examination Paper: Project Management
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IIBM Institute of Business Management
Section B: Caselets (40 marks)
•This section consists of Caselets.
•Answer all the questions.
•Each Caselet carries 20 marks.
•Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
It’s a Risky Business
Four friends wanted to start a business. After much discussion, they had hit upon the idea of launch a
mail-order toys and games business. They were in the development stage of their business plan and
wanted to be sure that they had been through with their planning. To reinforce this, they had just received
a letter from a group of venture capitalists, agreeing to fund the start up. It concluded its review of their
plan by stating:
The business plan presents a credible opportunity for all involved and we are prepared to approve the
funding request, subject to a risk analysis being carried out on the project to start the business.
The group was stunned-the funding that they had been hoping for was suddenly a reality. Just one thing
stood in their way- that damned risk analysis process.
They started with identifying the key risk elements that could face the business during in start up phase.
They considered the process between the time that they received the funding and day one of trading. What
could possibly go wrong? Lots of things. They brainstormed the possibilities and recorded them. They
then considered the effect that these would have on the project as a whole. The list they generated
prothings going wrong and not enough making sure that the positive steps towards the business opening
were happening. They needed to priorities’ the events. As importantly, what would happen, when they
eventually occurred? Who would be responsible for each of them? On what basis could they rank each
risk, in order to identify the most important risks for which they would develop mitigation and
ownership?
They decided to use a table to show the risk event, the likelihood, the severity and by multiplying the two
providing a risk priority number (RPN). This would the allow ranking of the risk elements. For the three
highest ranked elements, the group then generates a mitigation process with someone in the group taking
ownership of that process.
As can be seen, the top three risks were identified and mitigation tasks put in place to either prevent the
risk event happening or to reduce its effect. The initials of the ‘owners’ of that risk in the last column
show who has agreed to monitor that set of events and ensure that the mitigation is put into place before
the project suffers from that event occurring.
Questions:
1. What further methods could have been used to generate ideas for the identification part of the risk
process?
2. What should happen as the project progresses to manage risk?
Examination Paper: Project Management
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IIBM Institute of Business Management
Caselet 2
Fast-track Product Redevelopment at Instron
Background
Instron designs and manufactures machines for testing the properties of all types of material. One
particular plastic testing instrument has been selling around 250 units per year worldwide. In 1992 at the
height of the recession, with margins being squeezed and sales volume dropping, Instron decided to
redesign the instrument to reduce its cost and make it easier to manufacture.
The Project
Instron began to undertake change in the late 1980s, which included a programme to institute concurrent
new product development. This was accompanied by pressure for cost reduction, the introduction of
manufacturing changes, and the breaking of the firm into business teams.
The team was highly transient and changing environment, there were few restrictions on the way the
redesign project had to be handled. It was one of the first projects in Instron to be run from the beginning
as a concurrent engineering project. A small multi-functional team was formed, consisting of a
manufacturing engineer, a design engineer, a marketing engineer and a draughtsman. The design rief was
to improve the ease of manufacture of the product such tat a cost reduction of 20 percent could be
achieved.
The team was co-located in an area adjacent to the manufacturing facility. Although there was some
initial resistance, the comment was made that ‘they don’t know how they ever worked without it’. The
ease of communication and sharing of ideas became a more natural part of working life.
Adverse Effects
The principles of concurrency were, in general, favorably accepted by departments downstream of the
design process and with some notable exceptions, unfavorably viewed by the design department.
Individuals had concurrency imposed on them in the initial projects selected; be tried out. Senior
management staff was selected as champions of the cause, with the objective of overcoming the resistance
to change that existed. This came in a number of forms:
1. Passive resistance- summarized as ‘don’t show reluctance to apply the new ideas, attend all the
group meetings, nod in agreement, then carry on as before.
2. Active resistance- ‘do what you like, but don’t ask me to do it’
3. Undermining the initiative- through overstating the apparent problems.
They began by carrying out brainstorming sessions with manufacturing engineers, buyers, members of the
shop floor, suppliers and additional design engineers, to find new and innovative ways to improve the
product. The outcome of these investigations was to draw up a list of areas where improvements were
thought possible.
The Benefits Achieved
The results of this team’s action were:
•Cost reduced by 49 percent
•Product range rationalized from 12 to 2 versions
•Unique part count reduced from 141 to 98 and total number of parts reduced from 300 to 189
•Assembly/machining time reduced by 55 percent
•Project completed on time, with last version being released in April 1994.
Once operational, few problems were encountered and those that did occur were minor in nature. The
success was attributed by the firm to two decisions:
•The selection of the right project- one that made it easy to demonstrate concurrency
•The selection of the right people- those who were prepared to be open-minded and have some
enthusiasm for the changes.
The company now views this as a simple project that restored the profitability of an established product
through the use of innovation, ingenuity and new design techniques by the whole concurrent team. What
Examination Paper: Project Management
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IIBM Institute of Business Management
is also clear is that the product was subject to technical change in only one area- the materials used. The
other benefits have all been due to the approach tat the firm’s management has taken to its new product
development (NPD) Process. The firm felt that the project has been a success and that this method of
working would become an institutionalized methodology.
Questions:
1. Identify the steps the firm took in this project. How did this contribute to the success?
2. How might the main adverse effects be identified?
END OF SECTION B
Section C: Applied Theory (30 marks)
•This section consists of Applied Theory Questions.
•Answer all the questions.
•Each question carries 15 marks.
•Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. What is the role of strategy in Project Management?
2. Identify the different roles that cost, price and profit can play in determining project costs.
END OF SECTION C
Examination Paper: Project Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Project Management in IT
Section A: Objective Type (30 marks)
•This section consists of multiple choice questions and short notes type questions.
•Answer all the questions.
•Part One questions carry 1 mark each and Part two questions carry 5 marks each.
Part One:
Multiple choices:
1. The knowledge areas of Project Management Process Group are:
a. Planning and Initiating
b. Executing and Closing
c. Monitoring and Controlling
d. All of the above
2. To create a successful project, a project manager must consider:
a. Scope
b. Time
c. Cost
d. All of the above
3. Which one of the following is not involved in the top ten skills or competencies of an effective
project manager:
a. People skills
b. Leadership
c. Integrity
d. Technical skills
4. Another name of a phase exit is a _______ point.
a. Review
b. Stage
c. Meeting
d. Kill
5. Which process group includes activities from each of the nine knowledge areas?
a. Initiating
b. Planning
c. Executing
d. Closing
Examination Paper: Project Management
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IIBM Institute of Business Management
6. The project team works together to create the ______.
a. Scope statement
b. WBS
c. WBS dictionary
d. Work package
7. __________ is a network diagramming technique used to predict total project duration.
a. PERT
b. A Gantt chart
c. Critical Path Method
d. Crashing
8. Which of the following is not a key output of project cost management:
a. A cost estimate
b. A cost management plan
c. A cost baseline
d. None of the above
9. CMMI Stands for:
a. Capability Maturity Model Integration
b. Complex Maturity Model Integration
c. Common Maturity Model Information
d. Capability Maturity Model Information
10. A proposal evaluation sheet is an example of:
a. RFP
b. NPV analysis
c. Earned value analysis
d. Weighted scoring model
Part Two:
1. Define Product Life Cycle.
2. What is Project Integration Model?
3. Write a note on Gantt charts.
4. What is Project Quality Management?
END OF SECTION A
Examination Paper: Project Management
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IIBM Institute of Business Management
Section B: Caselets (40 marks)
•This section consists of Caselets.
•Answer all the questions.
•Each Caselet carries 20 marks.
•Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
A preliminary estimate of costs for the entire project is $140,000. This estimate is based on the
project manager working about 20 hours per week for six months and other internal staff working a
total of about 60 hours per week for six months. The customer representatives would not be paid for
their assistance. A staff project manager would earn $50 per hour. The hourly rate for the other
project team member would be $70 per hour, since some hours normally billed to clients may be
needed for this project. The initial cost estimate also includes $10,000 for purchasing software &
services from suppliers. After the project is completed, maintenance costs of $40,000 are included
for each year, primarily to update the information and coordinate the “Ask the Expert” feature and
online articles. Projected benefits are based on a reduction in hours consultants spend researching
project management information, appropriate tools and templates, and so on. Projected benefits are
also based on a small increase in profits due to new business generated by this project. If each of
more than 400 consultants saved just 40 hours each year (less than one hour per week) and could bill
that time to other projects that generate a conservative estimate of $10 per hour in profits, then the
projected benefit would be $160,000 per year. If the new intranet increased business by just 1
percent, using past profit information, increased profits due to new business would be at least
$40,000 each year. Total projected benefits, therefore, are about $200,000 per year.
Exhibit A summarizes the projected costs and benefits and shows the estimated net percent value
(NPV), return on investment (ROI), and year in which payback occurs. It also lists assumptions
made in performing this preliminary financial analysis. All of the financial estimates are very
encouraging. The estimate payback is within one year, as requested by the sponsor. The NPV is
$272,800, and the discounted ROI based on a three-year system life is excellent at 112 percent.
Discount rate 8%
Assume the
project is done
in about is
months
Year
0 1 2 3 Total
Costs 140,000 40,000 40,000 40,000
Discount
factor
1 0.93 0.86 0.79
Discounted
costs
140,000 37,037 34,294 31,753 243,084
Benefits 0 200,000 200,000 200,000
Discount
factor
1 0.93 0.86 0.79
Discounted
benefits
0 186,185 171,468 158,766 515,419
Discounted (140,000) 148,148 137,174 127,013
Examination Paper: Project Management
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IIBM Institute of Business Management
benefits –
costs
Cumulative
benefits-costs
(140,000) 8,148 145,322 272,336 NVP
Payback in
year 1
Discounted
life cycle
ROI----
112%
Assumptions
Costs #hours
PM (500hours,
$50/hour)
25,000
Staff (1500
hours,
$70/hour)
105,000
Outsourced
software &
services
10,000
Total project
costs (all
applied in year
0)
140,000
Benefits
# consultants 400
Hours saved 40
$/hour profit 10
Benefits from
saving time
160,000
Benefits from
1% increase in
profits
40,000
Total annual
projected
benefits
200,000
Questions:
1. What according to you are the factors that can hamper the profit growth related with the
project?
2. Mention some strategies to further improve the project’s turnover.
Examination Paper: Project Management
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IIBM Institute of Business Management
Caselet 2
Many organizations spend a great deal of time and money on training efforts for general project
management skills, but after the training, project managers may still not know how to tailor their
project management skills to the organization’s particular needs. Because of this problem, some
organizations develop their own internal information technology project management methodologies.
The PMBOKR Guide is a standard that describes best practices for what should be done to manage a
project. A methodology describes how things should be done, and different organizations often have
different ways of doing things. For example, after implementing a systems development life
cycle (SDLC) at Blue Cross Shield of Michigan, the Methods department became aware that
developers and project managers were often working on different information technology project in
different ways. Deliverables were often missing or looked different from project to project. They may
have all had a project charter, status report, technical documents (i.e., database design documents,
user interface requirements, and so on), but how they were producing and delivering these
deliverables was different. There was a general lack of consistency and a need for standards to guide
both new and experienced project managers. Top management decides to authorize funds to develop a
methodology for project managers that could also become the basis for information technology
project management training within the organization. It was also part of an overall effort to help raise
the company’s Software Capability Maturity Model level. BlueCross BlueShield of Michigan
launched a three-month project to develop its own project management methodology. Some of the
project team members had already received PMP certification, so they decided to base their
methodology on the PMBOKR Guide 2000, making adjustment as needed to best describe how their
organization managed information technology projects. See a complete article on this project on the
companion Web site for this text. Also see the Suggested Reading to review the State of Michigan
Project Management Methodology, which provides another good example of an information
technology project management methodology. Many organizations include project management in
their methodologies for managing Six Sigma projects. Other organizations include project
management in their software development methodologies, such as the Rational Unified Process
(RUP) framework. RUP is an interactive software development process that focuses on team
productivity and delivers software best practices to all team members. According to RUP expert Bill
Cottrell, “RUP embodies industry-standard management and technical methods and techniques to
provide a software engineering process particularly suited to creating and maintaining componentbased
software system solutions,” Cottrell explains that you can tailor RUP to include the PMBOK
process groups. Specifically, IBM Rational, the creators of RUP, found that it could adjust RUP input
artifacts with PMBOK process inputs, RUP steps with PMBOK process tools and techniques, and
RUP resulting artifacts with PMBOK process outputs.
Questions:
1. According to you what are the skills that needed for the project management of an organization?
2. How the six sigma project became a helpful tool in very sophisticated kind of project
management?
END OF SECTION B
Examination Paper: Project Management
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IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
•This section consists of Applied Theory Questions.
•Answer all the questions.
•Each question carries 15 marks.
•Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. What is cost? What is the importance of Project cost Management and explain basic principles of
Cost Management.
2. Define the following:
a. Resource Histograms
b. Project Communication Management
END OF SECTION C
S-2-260211
Examination Paper: Project Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Project Management
Section A: Objective Type (30 marks)
•This section consists of multiple choices questions and short answer type questions.
•Answer all the questions.
•Part One questions carry 1 mark each and Part Two questions carry 5 marks each.
Part One:
Multiple choices:
1. During _________formal tools and techniques were developed to help and manage large
complex projects.
a. 1950s
b. 1980s
c. 1920s
d. 1990s
2. PERT stands for:
a. Program Evaluation and Reverse Technique
b. Progress Evaluation and Review Technique
c. Program Evaluation and Review Technique
d. None of the above
3. The most basic model of any Operating System is:
a. Project Model
b. Input-output model
c. Output-input model
d. None of the above
4. Overall complexity =
a. Organizational complexity*resource complexity*technical complexity
b. Organizational complexity+technical complexity-resource complexity
c. Technical complexity+resource complexity/organizational complexity
d. Organizational complexity*resource complexity/technical complexity
5. Relevant areas of the APM body of knowledge are:
a. Quality Management
b. Budgeting and cost Management
c. Project Cost Management
d. Both ‘a’ and ‘b’
Examination Paper: Project Management
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IIBM Institute of Business Management
6. Costs associated with the planning process include:
a. Planer’s tools
b. Opportunity cost
c. Planned labour and associated expenses
d. All of the above
7. CPA stands for:
a. Critical Path Analysis
b. Common Path Analysis
c. Critical Path Algorithm
d. Common Problem Analysis
8. The project duration with the normal activity time is ____days.
a. 11
b. 16
c. 17
d. 21
9. The nature of the work organization is important as it:
a. Defines responsibility and authority
b. Outlines reporting arrangements
c. Determines the management overhead
d. All of the above
10. Matrix Management was invented by
a. Mullins
b. Belbin
c. Drucker
d. Frederick Taylor
Part Two:
1. Define ‘Cost Estimating Techniques’.
2. Write a note on ‘Critical Path Analysis’.
3. Differentiate between General Management and Project Management.
4. What is ‘Team Life Cycle’?
END OF SECTION A
Examination Paper: Project Management
3
IIBM Institute of Business Management
Section B: Caselets (40 marks)
•This section consists of Caselets.
•Answer all the questions.
•Each Caselet carries 20 marks.
•Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
It’s a Risky Business
Four friends wanted to start a business. After much discussion, they had hit upon the idea of launch a
mail-order toys and games business. They were in the development stage of their business plan and
wanted to be sure that they had been through with their planning. To reinforce this, they had just received
a letter from a group of venture capitalists, agreeing to fund the start up. It concluded its review of their
plan by stating:
The business plan presents a credible opportunity for all involved and we are prepared to approve the
funding request, subject to a risk analysis being carried out on the project to start the business.
The group was stunned-the funding that they had been hoping for was suddenly a reality. Just one thing
stood in their way- that damned risk analysis process.
They started with identifying the key risk elements that could face the business during in start up phase.
They considered the process between the time that they received the funding and day one of trading. What
could possibly go wrong? Lots of things. They brainstormed the possibilities and recorded them. They
then considered the effect that these would have on the project as a whole. The list they generated
prothings going wrong and not enough making sure that the positive steps towards the business opening
were happening. They needed to priorities’ the events. As importantly, what would happen, when they
eventually occurred? Who would be responsible for each of them? On what basis could they rank each
risk, in order to identify the most important risks for which they would develop mitigation and
ownership?
They decided to use a table to show the risk event, the likelihood, the severity and by multiplying the two
providing a risk priority number (RPN). This would the allow ranking of the risk elements. For the three
highest ranked elements, the group then generates a mitigation process with someone in the group taking
ownership of that process.
As can be seen, the top three risks were identified and mitigation tasks put in place to either prevent the
risk event happening or to reduce its effect. The initials of the ‘owners’ of that risk in the last column
show who has agreed to monitor that set of events and ensure that the mitigation is put into place before
the project suffers from that event occurring.
Questions:
1. What further methods could have been used to generate ideas for the identification part of the risk
process?
2. What should happen as the project progresses to manage risk?
Examination Paper: Project Management
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IIBM Institute of Business Management
Caselet 2
Fast-track Product Redevelopment at Instron
Background
Instron designs and manufactures machines for testing the properties of all types of material. One
particular plastic testing instrument has been selling around 250 units per year worldwide. In 1992 at the
height of the recession, with margins being squeezed and sales volume dropping, Instron decided to
redesign the instrument to reduce its cost and make it easier to manufacture.
The Project
Instron began to undertake change in the late 1980s, which included a programme to institute concurrent
new product development. This was accompanied by pressure for cost reduction, the introduction of
manufacturing changes, and the breaking of the firm into business teams.
The team was highly transient and changing environment, there were few restrictions on the way the
redesign project had to be handled. It was one of the first projects in Instron to be run from the beginning
as a concurrent engineering project. A small multi-functional team was formed, consisting of a
manufacturing engineer, a design engineer, a marketing engineer and a draughtsman. The design rief was
to improve the ease of manufacture of the product such tat a cost reduction of 20 percent could be
achieved.
The team was co-located in an area adjacent to the manufacturing facility. Although there was some
initial resistance, the comment was made that ‘they don’t know how they ever worked without it’. The
ease of communication and sharing of ideas became a more natural part of working life.
Adverse Effects
The principles of concurrency were, in general, favorably accepted by departments downstream of the
design process and with some notable exceptions, unfavorably viewed by the design department.
Individuals had concurrency imposed on them in the initial projects selected; be tried out. Senior
management staff was selected as champions of the cause, with the objective of overcoming the resistance
to change that existed. This came in a number of forms:
1. Passive resistance- summarized as ‘don’t show reluctance to apply the new ideas, attend all the
group meetings, nod in agreement, then carry on as before.
2. Active resistance- ‘do what you like, but don’t ask me to do it’
3. Undermining the initiative- through overstating the apparent problems.
They began by carrying out brainstorming sessions with manufacturing engineers, buyers, members of the
shop floor, suppliers and additional design engineers, to find new and innovative ways to improve the
product. The outcome of these investigations was to draw up a list of areas where improvements were
thought possible.
The Benefits Achieved
The results of this team’s action were:
•Cost reduced by 49 percent
•Product range rationalized from 12 to 2 versions
•Unique part count reduced from 141 to 98 and total number of parts reduced from 300 to 189
•Assembly/machining time reduced by 55 percent
•Project completed on time, with last version being released in April 1994.
Once operational, few problems were encountered and those that did occur were minor in nature. The
success was attributed by the firm to two decisions:
•The selection of the right project- one that made it easy to demonstrate concurrency
•The selection of the right people- those who were prepared to be open-minded and have some
enthusiasm for the changes.
The company now views this as a simple project that restored the profitability of an established product
through the use of innovation, ingenuity and new design techniques by the whole concurrent team. What
Examination Paper: Project Management
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IIBM Institute of Business Management
is also clear is that the product was subject to technical change in only one area- the materials used. The
other benefits have all been due to the approach tat the firm’s management has taken to its new product
development (NPD) Process. The firm felt that the project has been a success and that this method of
working would become an institutionalized methodology.
Questions:
1. Identify the steps the firm took in this project. How did this contribute to the success?
2. How might the main adverse effects be identified?
END OF SECTION B
Section C: Applied Theory (30 marks)
•This section consists of Applied Theory Questions.
•Answer all the questions.
•Each question carries 15 marks.
•Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. What is the role of strategy in Project Management?
2. Identify the different roles that cost, price and profit can play in determining project costs.
END OF SECTION C
Examination Paper: Project Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Project Management in IT
Section A: Objective Type (30 marks)
•This section consists of multiple choice questions and short notes type questions.
•Answer all the questions.
•Part One questions carry 1 mark each and Part two questions carry 5 marks each.
Part One:
Multiple choices:
1. The knowledge areas of Project Management Process Group are:
a. Planning and Initiating
b. Executing and Closing
c. Monitoring and Controlling
d. All of the above
2. To create a successful project, a project manager must consider:
a. Scope
b. Time
c. Cost
d. All of the above
3. Which one of the following is not involved in the top ten skills or competencies of an effective
project manager:
a. People skills
b. Leadership
c. Integrity
d. Technical skills
4. Another name of a phase exit is a _______ point.
a. Review
b. Stage
c. Meeting
d. Kill
5. Which process group includes activities from each of the nine knowledge areas?
a. Initiating
b. Planning
c. Executing
d. Closing
Examination Paper: Project Management
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IIBM Institute of Business Management
6. The project team works together to create the ______.
a. Scope statement
b. WBS
c. WBS dictionary
d. Work package
7. __________ is a network diagramming technique used to predict total project duration.
a. PERT
b. A Gantt chart
c. Critical Path Method
d. Crashing
8. Which of the following is not a key output of project cost management:
a. A cost estimate
b. A cost management plan
c. A cost baseline
d. None of the above
9. CMMI Stands for:
a. Capability Maturity Model Integration
b. Complex Maturity Model Integration
c. Common Maturity Model Information
d. Capability Maturity Model Information
10. A proposal evaluation sheet is an example of:
a. RFP
b. NPV analysis
c. Earned value analysis
d. Weighted scoring model
Part Two:
1. Define Product Life Cycle.
2. What is Project Integration Model?
3. Write a note on Gantt charts.
4. What is Project Quality Management?
END OF SECTION A
Examination Paper: Project Management
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IIBM Institute of Business Management
Section B: Caselets (40 marks)
•This section consists of Caselets.
•Answer all the questions.
•Each Caselet carries 20 marks.
•Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
A preliminary estimate of costs for the entire project is $140,000. This estimate is based on the
project manager working about 20 hours per week for six months and other internal staff working a
total of about 60 hours per week for six months. The customer representatives would not be paid for
their assistance. A staff project manager would earn $50 per hour. The hourly rate for the other
project team member would be $70 per hour, since some hours normally billed to clients may be
needed for this project. The initial cost estimate also includes $10,000 for purchasing software &
services from suppliers. After the project is completed, maintenance costs of $40,000 are included
for each year, primarily to update the information and coordinate the “Ask the Expert” feature and
online articles. Projected benefits are based on a reduction in hours consultants spend researching
project management information, appropriate tools and templates, and so on. Projected benefits are
also based on a small increase in profits due to new business generated by this project. If each of
more than 400 consultants saved just 40 hours each year (less than one hour per week) and could bill
that time to other projects that generate a conservative estimate of $10 per hour in profits, then the
projected benefit would be $160,000 per year. If the new intranet increased business by just 1
percent, using past profit information, increased profits due to new business would be at least
$40,000 each year. Total projected benefits, therefore, are about $200,000 per year.
Exhibit A summarizes the projected costs and benefits and shows the estimated net percent value
(NPV), return on investment (ROI), and year in which payback occurs. It also lists assumptions
made in performing this preliminary financial analysis. All of the financial estimates are very
encouraging. The estimate payback is within one year, as requested by the sponsor. The NPV is
$272,800, and the discounted ROI based on a three-year system life is excellent at 112 percent.
Discount rate 8%
Assume the
project is done
in about is
months
Year
0 1 2 3 Total
Costs 140,000 40,000 40,000 40,000
Discount
factor
1 0.93 0.86 0.79
Discounted
costs
140,000 37,037 34,294 31,753 243,084
Benefits 0 200,000 200,000 200,000
Discount
factor
1 0.93 0.86 0.79
Discounted
benefits
0 186,185 171,468 158,766 515,419
Discounted (140,000) 148,148 137,174 127,013
Examination Paper: Project Management
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IIBM Institute of Business Management
benefits –
costs
Cumulative
benefits-costs
(140,000) 8,148 145,322 272,336 NVP
Payback in
year 1
Discounted
life cycle
ROI----
112%
Assumptions
Costs #hours
PM (500hours,
$50/hour)
25,000
Staff (1500
hours,
$70/hour)
105,000
Outsourced
software &
services
10,000
Total project
costs (all
applied in year
0)
140,000
Benefits
# consultants 400
Hours saved 40
$/hour profit 10
Benefits from
saving time
160,000
Benefits from
1% increase in
profits
40,000
Total annual
projected
benefits
200,000
Questions:
1. What according to you are the factors that can hamper the profit growth related with the
project?
2. Mention some strategies to further improve the project’s turnover.
Examination Paper: Project Management
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IIBM Institute of Business Management
Caselet 2
Many organizations spend a great deal of time and money on training efforts for general project
management skills, but after the training, project managers may still not know how to tailor their
project management skills to the organization’s particular needs. Because of this problem, some
organizations develop their own internal information technology project management methodologies.
The PMBOKR Guide is a standard that describes best practices for what should be done to manage a
project. A methodology describes how things should be done, and different organizations often have
different ways of doing things. For example, after implementing a systems development life
cycle (SDLC) at Blue Cross Shield of Michigan, the Methods department became aware that
developers and project managers were often working on different information technology project in
different ways. Deliverables were often missing or looked different from project to project. They may
have all had a project charter, status report, technical documents (i.e., database design documents,
user interface requirements, and so on), but how they were producing and delivering these
deliverables was different. There was a general lack of consistency and a need for standards to guide
both new and experienced project managers. Top management decides to authorize funds to develop a
methodology for project managers that could also become the basis for information technology
project management training within the organization. It was also part of an overall effort to help raise
the company’s Software Capability Maturity Model level. BlueCross BlueShield of Michigan
launched a three-month project to develop its own project management methodology. Some of the
project team members had already received PMP certification, so they decided to base their
methodology on the PMBOKR Guide 2000, making adjustment as needed to best describe how their
organization managed information technology projects. See a complete article on this project on the
companion Web site for this text. Also see the Suggested Reading to review the State of Michigan
Project Management Methodology, which provides another good example of an information
technology project management methodology. Many organizations include project management in
their methodologies for managing Six Sigma projects. Other organizations include project
management in their software development methodologies, such as the Rational Unified Process
(RUP) framework. RUP is an interactive software development process that focuses on team
productivity and delivers software best practices to all team members. According to RUP expert Bill
Cottrell, “RUP embodies industry-standard management and technical methods and techniques to
provide a software engineering process particularly suited to creating and maintaining componentbased
software system solutions,” Cottrell explains that you can tailor RUP to include the PMBOK
process groups. Specifically, IBM Rational, the creators of RUP, found that it could adjust RUP input
artifacts with PMBOK process inputs, RUP steps with PMBOK process tools and techniques, and
RUP resulting artifacts with PMBOK process outputs.
Questions:
1. According to you what are the skills that needed for the project management of an organization?
2. How the six sigma project became a helpful tool in very sophisticated kind of project
management?
END OF SECTION B
Examination Paper: Project Management
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IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
•This section consists of Applied Theory Questions.
•Answer all the questions.
•Each question carries 15 marks.
•Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. What is cost? What is the importance of Project cost Management and explain basic principles of
Cost Management.
2. Define the following:
a. Resource Histograms
b. Project Communication Management
END OF SECTION C
S-2-260211
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